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A Chinese carbon market remains years away despite high expectation, observers said Monday.
Hydro-intensive Sichuan in southern China on Monday became the latest province to ponder the introduction of a local emissions trading scheme, as Chinese regions scramble for position in the emerging low-carbon market.
Guangdong and Hebei provinces have already submitted bids to host carbon trading schemes to the central government in Beijing, as has the city of Wuhan in Hubei province.
But despite much talk about an emerging Chinese market, a mandatory carbon regime in China is thought by many market watchers to be several years away at least.
“It can take three to five years or even longer before a market emerges,” Wilson Tang, China director at carbon trading company Climate Change Capital told Point Carbon News.
A lack of a trading infrastructure and the fact that there are no real records of Chinese firms’ emissions are major obstacles to introducing a scheme, he said.
Tang added that the emergence of regional schemes could be a useful start on the path to a nationwide emissions trading scheme (ETS).
Local interest in emissions trading has sky-rocketed since Chinese media reported in June last year that an inter-ministerial meeting headed by China’s National Development and Reform Commission (NDRC) would set up a pilot scheme within five years.
Some 20 regional carbon exchanges have been initiated over the past three years, although most of them have yet to offer any trade on their platforms.
All interested cities and provinces must get their plans approved by Beijing before they can implement their own markets.
Beijing is making final preparations for its next five-year plan, which will be adopted in March.
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